Global Economy’s Dream Come True- US & Europe mulling over a Free Trade Agreement

Two of the biggest financial superpowers of the world, the United States (US) and the European Union (EU) are finally getting round to finalizing on something that holds great implications for the world at large- a free trade agreement. Though the talks of a probable FTA have been lingering for two long years, fruition of this momentous agreement is finally nearing completion after a stormy duration of uncertainty through issues like the US’s ‘Buy American’ policy- a regulation which ensures that US agricultural produce holds precedence in bids put out to public tender, EU’s strict stand against genetically modified crops (GMO), key financial policies governed independently by both the US and EU and finally, the PRISM program, a eavesdropping initiative sponsored by the United States. A FTA is in the best interests of not just the US and Europe, but also positively impacts the other economies of the world, strengthening grassroots to multinational businesses and opening up the global market for competition.

The numbers are impressive, the current trade between the US and EU accounts for nearly 50% of the global economic output. If this FTA, titled- Transatlantic Trade and Investment Partnership (TTIP), becomes a reality, it will be the biggest trade agreement in history, connecting the powerful US economy to the 28 member nations of the EU in a mutually beneficial bond that will boost economic cooperation and increase accountability. A FTA of this magnitude will add about $420 billion every year to the global economy and facilitate in the creation of over 2 million jobs. This FTA is expected to be finalized upon by November 2014.

A Free Trade Agreement serves to remove barriers (mostly those created by specific government regulations) against free trade. Naturally, the removal of such legal protection will expose businesses to unprecedented competition from local and international competitors. This will result in the expulsion of those businesses that cannot compete, thus forcing businesses to innovate and focus, which in turn contributes to a stronger economy. While this might seem deterrent to the spirit of entrepreneurship and fair play, in actuality, the FTA saves these honest businesses from draconian regulations imposed by economies to support their home businesses at the expense of their international competitors. The FTA works on the essence that fair competition is fundamental to maintaining a healthy and productive economy.